While affordability guidelines are designed to prevent over-borrowing, Leeds Building Society highlights that first-time buyers are still cautious at the moment, a sentiment echoed by the latest data from the Bank of England showing a decline in mortgage approvals. If you’re one of the people who is still looking to get a mortgage, here’s something you need to pay attention to. ChronicleLive had a useful article about certain behaviors or financial choices, often overlooked, that can raise red flags for mortgage lenders, and reduce your chances of getting approved:

1. Buy Now, Pay Later Schemes

Services like Klarna or PayPal’s Pay in 3 offer tempting flexibility but beware—lenders might view these as signs of overreaching financially. Nicholas Mendes from John Charcol advises that lenders will scrutinize your credit history not once, but twice, and any reliance on such payment options could jeopardize your application.

2. Gambling Habits

A casual flutter may seem harmless, but to a lender, regular betting can indicate risky spending behaviors. Frequent transactions with gambling sites or large sums spent on lotteries and bingo might alarm potential lenders.

3. The Burden of Multiple Store Cards

Store cards, akin to credit cards, are a modern convenience, but lenders look at how you manage them. Struggling to clear your monthly balance? It signals to lenders that your financial management might not be up to scratch.

4. The Devil’s in the Detail—Paperwork Problems

Mortgage applications require a raft of paperwork, and inaccuracies could sink your chances. Any hint of fraudulent activity or significant errors could lead to an outright decline.

5. Provenance of Your Deposit

The origin story of your deposit matters. Gifts from family are generally accepted, but lenders need to know it’s not a loan in disguise. Deposits stemming from unverified sources or loans can raise serious red flags.

6. Inconsistent Income

Lenders will balance your income against outgoings, so stability is key. Changes in employment or a salary primarily composed of cash payments can signal to lenders that your financial future might not be secure.

The Outlook for Aspiring Homeowners

The journey to homeownership is becoming increasingly complex, with financial scrutiny intensifying. First-time buyers must navigate through a maze of financial checks and balances. It’s essential to maintain a solid financial footing and ensure all aspects of your financial history and present are in order to present the best case to mortgage lenders.